Australian Broker Call

UBS rates AMC as Upgrade to Buy from Neutral (1) -

UBS raises its target for Amcor to $18.25 from $16.90 upgrades to Buy (from Neutral) for the first time in around three years. The analysts see the Berry merger as a catalyst for a forecast 12% EPS compound annual growth rate (CAGR) over FY25–28.

The broker expects full delivery of $650m in synergy benefits, with just 10% priced into shares and consensus assuming around 70%.

Amcor’s revised capital plan, including $1.2bn in potential share buybacks and higher growth capex, is seen by UBS as supportive of earnings growth and a multiple re-rating.

The broker sees a shift from stagnant EPS to sustained double-digit growth as Amcor invests more in high-growth packaging categories. 

Target price is $18.25 Current Price is $13.99 Difference: $4.26
If AMC meets the UBS target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $17.49, suggesting upside of 23.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates AZJ as Neutral (3) -

Citi has updated its model for Aurizon Holdings to reflect the FY25 underlying EBITDA of $1.575bn and other numbers, including higher D&A and interest expenses.

This has pushed down its profit before tax forecast to $505m vs the consensus of $554m.

Target price cut to $3.25 from $3.40. Neutral.

Target price is $3.25 Current Price is $2.99 Difference: $0.26
If AZJ meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates AZJ as Upgrade to Outperform from Neutral (1) -

FY25 will mark Aurizon’s weakest year since 2013, observes Macquarie, with coal volumes flat and contract delays weighing on performance. Management is expecting underlying earnings (EBITDA) of around $1.575m.

The broker forecasts a recovery in FY26, supported by a $100m uplift in regulated network revenue and benefits from a cost-out program.

Expected earnings for FY25 were 2.1% ahead of the analyst's expectations, but downgrades have been made to the broker's FY25-27 earnings forecasts  due to weaker coal volumes and network under-recovery.

Macquarie retains its price target at $3.39 and upgrades to Outperform from Neutral.

Target price is $3.39 Current Price is $2.99 Difference: $0.4
If AZJ meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgan Stanley rates AZJ as Underweight (5) -

Morgan Stanley reckons Aurizon Holdings' earnings downgrade is not surprising given it had already flagged FY25 headwinds.

The company lowered FY25 EBITDA guidance to $1.575bn from $1.66-1.74bn range, and this is lower than the broker's $1.611bn forecast and consensus of $1.644bn. The under-recovery in Network volume of -$50m will be recovered in FY27, so this needn't worry investors, the broker says.

The analyst estimates the update implies FY25 net profit will be around $354m vs the consensus of $391m, and dividend at 80% payout will be 16c vs 17c consensus.

Underweight. Target price $3.03. Industry View: In-Line

Target price is $3.03 Current Price is $2.99 Difference: $0.04
If AZJ meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgans rates AZJ as Downgrade to Hold from Accumulate (3) -

While the short term earnings risk has most likely been taken care of --by yet another profit warning, mind you-- Morgans has in addition dimmed its outlook for the coal transporting business, the highest quality part of Aurizon Holdings.

The business is moving away from its legacy coal transport business, but the broker argues this is also of lower-quality and against fierce competition.

Short term the shares look attractive, but it's the medium term outlook that triggers the downgrade to Hold from Accumulate. Price target has fallen to $2.94 (was $3.10).

Target price is $2.94 Current Price is $2.99 Difference: minus $0.05 (current price is over target).
If AZJ meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.15, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates AZJ as Hold (3) -

Ord Minnett notes Aurizon Holdings cited higher bad debt provisioning and lower-than-expected network division volumes when downgrading FY25 EBITDA guidance.

Those issues were flagged in May, the broker highlights, but the expectation then was the guidance would still be met.

The broker cut FY25 EPS forecast by -15.1% and FY26 by -4.1%, while lifting FY27 by 5.4%.

Hold. Target cut to $3.10 from $3.20.

Target price is $3.10 Current Price is $2.99 Difference: $0.11
If AZJ meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 5.4% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates AZJ as Neutral (3) -

UBS notes Aurizon Holdings' FY25 update came in below expectations, with earnings (EBITDA) -3% below the broker's forecast and pre-tax profit disappointing by -9%.

Management deferred $50m of Network income to FY27, versus the analysts' earlier estimate of $19m, which explains most of the earnings miss. Adjusting for the income timing, UBS sees the earnings miss as closer to -1%.

While capex was revised around -$90m lower, providing free cash flow relief, the broker suggests dividend payments could be at risk.

UBS retains its price target of $3.20 and Neutral rating.

Target price is $3.20 Current Price is $2.99 Difference: $0.21
If AZJ meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates CBA as Sell (5) -

Lately, everyone seems to have an opinion on where Australian bank valuations should sit.

UBS is the latest to weigh in, arguing the gap between current share prices and expected returns remains significant. In the broker’s view, fair value for the sector is around -17% below where the banks are currently trading.

The main point of contention remains the valuation of CommBank.

UBS notes the sell side continues to lean negative, with consensus reflecting a consistent underweight stance.

While CommBank stands out as the highest-quality bank, delivering a sector-leading return on equity around 350bps above peers since 2018, the broker believes the premium is hard to justify.

More positively, UBS is constructive on the bank's Business Banking strategy and sees optionality to drive above-system mortgage growth if desired.

Still, the elevated valuation remains a sticking point, underpinning the broker’s unchanged Sell rating. Target of $120 is maintained.

UBS also leaves its targets and ratings unchanged for all other banks under coverage.

Target price is $120.00 Current Price is $190.71 Difference: minus $70.71 (current price is over target).
If CBA meets the UBS target it will return approximately minus 37% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $109.25, suggesting downside of -41.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates EOS as Buy (1) -

After revisiting forecasts for Electro Optic Systems, Bell Potter is confident the company is on track to meet the FY25 forecasts and has upgraded longer-term forecasts. This is to reflect NATO commitment to increase defence expenditure over the next 10 years.

The broker notes the recent remote weapon system contract for $53m has pushed contract backlog to $190m, with $140m to be delivered this FY. Revenue for 1H is expected to be $64m, with the balance in 2H due to a 40%/60% split.

Buy. Target price rises to $3.10 from $2.15 on revision to valuation multiples

Target price is $3.10 Current Price is $2.65 Difference: $0.45
If EOS meets the Bell Potter target it will return approximately 17% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates MMI as Buy, High Risk (1) -

Shaw and Partners visited Metro Mining's Bauxite Hills operations for the third time in 18 months, noting an upgrade to a 7Mt production target following improvements to processes.

The broker is confident in its forecast for 6.6Mt FY25 production vs the company's reiterated guidance of 6.5-7.0Mt despite a downgrade in June quarter production due to barge constraints. FY26 forecast remains at 7.5Mt.

An offset to lower June quarter production is higher prices, with the broker lifting bauxite prices to $72wmt from $70wmt. 

Buy, High Risk. Target unchanged at 17c.

Target price is $0.17 Current Price is $0.06 Difference: $0.108
If MMI meets the Shaw and Partners target it will return approximately 174% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates MVF as Outperform (1) -

Macquarie notes total Medicare IVF cycles fell -2.5% y/y in May, taking the 2H25 year-to-date growth to 1.2% y/y. Fresh cycles fell -5.4% y/y and frozen were up 1.6%.

The broker reiterated expectations for domestic market cycles growth of 0.4% in 2H25 and a -2.6% decline for Monash IVF due to market share loss. 

Outperform. Target retained at $1.30.

Target price is $1.30 Current Price is $0.67 Difference: $0.63
If MVF meets the Macquarie target it will return approximately 94% (excluding dividends, fees and charges).

Current consensus price target is $1.10, suggesting upside of 59.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates NST as Buy (1) -

Citi has lowered FY25-27 EBITDA forecasts for Northern Star Resources after upwardly revising capex forecasts for FY26 to align with consensus, trimming FY26 production forecast by -2%, and on higher forex expectations.

FY25 EBITDA forecast cut by -1%, FY26 by -6% and FY27 by -5%. Target price trimmed to $22.00 from $22.50. Buy retained.

Target price is $22.00 Current Price is $18.84 Difference: $3.16
If NST meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $22.42, suggesting upside of 22.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates SMI as Buy, High Risk (1) -

Santana Minerals published results of another phase of test work for the Rise and Shine and Srex deposits, which showed a slight improvement in metallurgy vs the November pre-feasibility study.

Shaw and Partners made no changes to forecasts. Buy, High Risk. Target unchanged at $1.36.

The broker re-iterated the stock is among its top 10 small cap picks for 2025.

Target price is $1.36 Current Price is $0.54 Difference: $0.82
If SMI meets the Shaw and Partners target it will return approximately 152% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates WOW as Neutral (3) -

As previously flagged by Woolworths Group, the company is closing the MyDeal website by September 30.

Citi analysts explaining they were very critical of the acquisition back in 2022 for -$200m (80% interest) due to the viewed parallels with the previous failed EziBuy purchase.

Citi notes cash closure costs between -$90m–$100m, with a -$45m cost impairment, with MyDeal estimated at around $20m of the forecast $65m for the MarketPlus and HealthLife segment in FY25.

As management completes a further portfolio review, more changes are expected by Citi. No change to Neutral rating and $33 target price.

Target price is $33.00 Current Price is $31.45 Difference: $1.55
If WOW meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $33.04, suggesting upside of 6.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.4

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates WTC as No Rating (-1) -

Macquarie explains some of WiseTech Global's key customers are worried about the company's major market position and price increases as the commercial model is rolled out.

The analyst highlights some freight forwarders may look to other vendors for some functions, which has the potential to impact Next & CommercialWise.

Delays to CTO have resulted in negative operating leverage and higher depreciation & amortisation assumptions, with Macquarie tweaking EPS estimates by 3% for FY25 and lowering FY26/FY27 by -13%.

Longer term, transitioning the Commercial Model is necessary to achieve the "value-share" strategy.

Macquarie is under research restrictions for WiseTech Global.

Current Price is $107.64. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgans rates XRO as Accumulate (2) -

Morgans highlights the acquisition of US payments business, Melio, for -US$2.5bn will be earnings dilutive in the short term as the acquired business is loss-making.

The medium-term prospects are more positive with the addition of compelling digital payments and accounting.

With the company's research inferring over 60% of Xero's North American customers wanting both accounting and accounts payable combined, Melio will facilitate the desired outcome, the analyst explains.

The initial earnings forecast analysis suggests Melio will be EPS dilutive to Xero for the next two years and positive in three years' time.

No change to the broker's earnings forecasts at this stage. No change to Accumulate rating and $2.15 target price.

Target price is $215.00 Current Price is $184.00 Difference: $31
If XRO meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $211.50, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY26:

Forecast for FY27:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources